Final answer:
The corrected journal entry for issuing 21,000 shares of $6 par value common stock in exchange for land and building includes debiting Land for $240,000, debiting Building for $362,000, crediting Common Stock for $126,000, and crediting Paid in Capital in Excess of Par Value for $476,000.
Step-by-step explanation:
To prepare the journal entry for the issuance of stock in exchange for land and a building, we need to recognize the assets received and the stock issued at their fair market values.
Initially, we have the company issuing 22,000 shares of $7 par value common stock for land valued at $235,000 and a building valued at $367,000. However, we then receive a correction, stipulating instead the issuance of 21,000 shares at a $6 par value for land valued at $240,000 and a building valued at $362,000. For this second transaction, the journal entry would be:
Debit Land $240,000
Debit Building $362,000
Credit Common Stock $126,000
Credit Paid in Capital in Excess of Par Value $476,000
To calculate the credits, we multiply the number of shares issued (21,000) by the par value per share ($6) to get the Common Stock value. The difference between the total value of land and building ($602,000) and the value of common stock ($126,000) is credited to Paid in Capital in Excess of Par Value.